Wesfarmers free essay sample

Sustainability reporting is an annual report of a company which indicates non-financial information including environment, economy and society to the public and shareholders. Companies increasingly put more emphasis on sustainability reporting at present and face the problem of how to make effective reports of sustainability. Then in order to find and solve the problem of companies’ sustainability reporting, several standards such as Global Reporting Initiative (GRI) are used to check the quality of the report for sustainability. This report illustrates the reasons why companies make reporting for sustainability, how to make the report to be well-written and finally appraises 2011 sustainability reporting of Wesfarmers, a food processing company. 2. Reasons for company to make reporting for sustainability 3. 1 Improvement of companies’ non-financial performance and the sense of social responsibility The reports of sustainability can urge companies to make effort to be sustainable. It means that companies will improve the non-financial performance and the sense of social responsibility by sustainable reporting. We will write a custom essay sample on Wesfarmers or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page After analyzing the data, the companies which make sustainability reporting improve their ranking of social responsibility by 8% more than the companies which lack of sustainability reporting (Blanding 2011, p. 5). 3. 2 Benefits to environment, economy and society Sustainability reporting highlights what a company does to keep environment, economy and society balance. Hence adding non-financial information in a company’s annual report makes sure the company to do right thing to benefit all the three aspects. For example, because of sustainability reporting, company will take climate change into consideration instead of considering the profits only (Steidl 2010, p. 39). In additional, an effective sustainability reporting can help companies to achieve high reputation in the society and then create more shareholders’ wealth (Borkowski et al 2010, p. 32). 3. Key features of Sustainability Report 4. 3 Report Content 3. 11 Materiality In food processing industry, the information in sustainability reporting needs to be chosen which is relevant to sustainability and stakeholders’ decision in different aspect. It is means that the content of sustainability reporting needs to include the influence of companies’ activities to environment, economy as well as society. Due to the requirement of the GRI guidelines (GRI, 2006, p. 1), companies can check if their sustainability report content illustrates the impact on environment, society and economy or stakeholders (Flynn 2009, p. 15). Moreover, the information needs to be made sure that is useful, relevant and comparable for appraising strategic organizational performance (Hubbard 2011, p. 4). 3. 12 Completeness Completeness of sustainability reporting is to make sure the information in the report is complete, covering all the aspects of company’s sustainability. It includes not only the relevant information of the sustainable impacts, but also the information that can make stakeholders to evaluate the performance of the reporting organization. However, there are many companies only focus on the environmental issue at present, which makes the sustainability reporting incomplete (Gray amp; Milne 2002, p. 67). 4. 4 Report Quality 3. 21 Balance Balance is one of the most important key factors to make an effective sustainability reporting. Keeping the report balance is to expose both good news and bad news of companies’ sustainability so that audience and stakeholders can have correct and fair evaluation about companies’ sustainable performance. Parker (2010, p35) points out that a short balanced sustainability report is better than a long report which shares the positive aspects only. Moreover, if a sustainability reporting only has good news to indicate, it is a dishonest report which does not tell the whole story (Parker 2010, p. 4). 3. 22 Timeliness If a sustainability reporting is regularly scheduled, the information will share in time so that stakeholders can make well-informed decision. A clear timeliness can help companies work out a high-quality report of sustainability. If a company takes sustainability reporting seriously, it will dividend sustainability into the day-to-day work (Parker 2010, p. 36). 4. Evaluation of 2011 Sustainability Reporting of Wesfarmers 4. 1 Report Content 4. 11 Materiality The sustainability report of Wesfarmers meets the demand of materiality which means that the report refers to environment, society, and economy. The information in the report is almost relevant and meets the requirement. Wesfarmers provides the useful date and information in the report. The content of sustainability report includes materials and water in environment, contribution to community in society and market presence in economy (Wesfarmers 2011, p7). For example, Wesfarmers makes efforts on saving water so that during 2011 it increases 7. % of waste of water compared to 2010 (Wesfarmers 2011, p. 16). 4. 12 Completeness Wesfarmers’s sustainability report has no problem about completeness. It illustrates the companies’ effort and consequence on all the three aspect and as well illustrates the stakeholders companies’ performance. There are several tables about retail, industrial, other business and Wesfarmers group that provide the data to stakeholders and aud iences to prove Wesfarmers’ improvement of sustainability in all the aspects during the 2011 (Wesfarmers 2011, p. 4-7). In addition, comparing to other companies’ sustainability reports which only focus on environmental impact, Wesfarmers also focuses on the impact on society, such as their social reputation (Wesfarmers, 2011, p51). For instance, there is $77. 57 million, which is an increase of 69% compared to last year, that Wesfarmers contributed in community support including both direct and indirect activities (Wesfarmers 2011, p. 18). 4. 2 Report Quality 4. 21 Balance This sustainability report is a long report and has both positive and negative aspects. Wesfarmers not only demonstrates the good news to people, but also the problems it has. Wesfarmers lists which goals it achieves and which goals it has not met (Wesfarmers 2011, p. 35). In 2011, Wesfarmers has not achieved the target that All Injury Frequency Rate (AIFR) needs to be reduced by 15% while AIFR only has been reduced by 1. 36% (Wesfarmers 2011, p. 35). 4. 22 Timeliness Timeliness is a shortcoming of Wesfarmers’ sustainability report. It cannot be seen a regular schedule that Wesfarmers includes in their sustainability report. There are only several monthly reports, such as the report about contamination received in July 2011, but the sustainability report lacks clear timeliness (Wesfarmers, 2011, p31). 5. Conclusion First, the report clarifies the necessity of company to produce sustainability reporting. Second, the significant factors of a high-quality sustainability report are explained. Finally, the report assesses the Wesfarmers’ sustainability report by using those factors. A well-written report of sustainability which is relevant, complete, balanced and scheduled, not only benefits environment, society and economy, but also companies and stakeholders. The 2011 sustainability report of Wesfarmers is a high-standard report despite the problem about timeliness. Its content is so relevant and complete so that audience and stakeholders can know the company’s overall sustainable performance and its balance reflects the real situation about company to people.